More than 19.9 million students enrolled in college nationwide in 2018, and about half bring a car with them to school. That’s a lot of vehicles—more than 9.3 million—and a lot of responsibility for young adults who may be living away from home for the first time. Here’s what college-bound drivers and their parents can do to keep their vehicle running smoothly and prepare for unforeseen mishaps.
1. Contact your insurance agent.
The first call you should make is to your insurance agent, even if the car is staying behind. In most cases, a student can remain on a parent’s policy, if the following conditions are met:
- The student’s primary residence is still the family home. This generally means the student lives on campus or rents an apartment only during the school year. Check with your agent to be sure this applies to your policy.
- The car title is in a parent’s name, not the student’s. If it is jointly titled, the vehicle can likely remain on the parent’s policy as well.
- The student lives with one or both parents while commuting to campus. In this case, because the driver’s residency and the vehicle location haven’t changed, the existing policy can likely be continued until the student has a new permanent address.
Staying on a household policy can save money. Students typically pay a lower annual premium on a parent’s policy than if they purchase an individual policy, and keeping continuous coverage in good standing helps students secure a lower rate after they finish school and venture out on their own.
Ask your agent about other discounts that may be available, such as good grade discounts. Most companies extend this discount to unmarried, full-time students until they turn 25. Check with your agent for specific requirements.
What if the student is going to school out of state? If this is the case, it is especially important to notify your insurance provider. They need to know where the vehicle will be primarily located to ensure that minimum liability requirements are met. These vary from state to state, and your provider will know the requirements of each state it’s licensed to do business in so you can get the right coverage. If the address will still be the student’s permanent address, they can usually stay on a parent’s policy.
And, if the vehicle is staying home when the student is away, there may be options to reduce your payment. Some providers offer resident student discounts to students attending college at least 100 miles away from home who are not bringing their car. Or, you could potentially save money by classifying the student as an “occasional” or “pleasure-only” driver on the policy. This will cover the student if they are only driving the car on occasional weekends or breaks. But, once the student returns home for the summer, or decides to bring the vehicle to school with them, be sure to revisit this so that you are not denied coverage for misrepresenting how often the vehicle is being driven.
Once you have the right coverage for your situation, it’s important to consider the responsibilities of having a vehicle away from home. Think carefully before loaning the vehicle to friends or roommates; these are what insurance companies refer to as “permissive drivers”—someone who is not listed on the insurance policy, but uses the vehicle with the permission of its owner. If a friend gets into a wreck while driving your car, it affects your insurance, not theirs. In fact, insurance companies may be able to reduce or deny coverage if they determine that you or the “permissive driver” failed to comply with the terms of your policy. And if a friend who doesn’t have insurance gets into a crash that involves bodily or property damage, you could be held responsible.
“In general, when there is an accident, the insurance company will go back and look at the policy to see if there was any misrepresentation about where and how much the vehicle is driven. And if there is, the claim may not be covered,” says Gary Reid, manager of insurance operations for AAA. “With students, there’s a higher probability that they’ll take a look at this. For example, if the car is listed as being at home, why was it in an accident 600 miles away?”
Weigh the responsibilities of owning a car away from home and review your coverage with your agent before you commit to sending the car off to college.